Archive for November 2012

There has been much attention paid to happiness lately. It is a hot topic. Economists have been talking about the role of government in producing happiness and how it could be used to measure the success of an economy. Measures of happiness have been discussed as a supplement to the traditional measure of GDP or even to replace it. The Organization for Economic Cooperative Development (OECD) has a formal program to measure happiness across their member countries and at their conferences there are presentations on the importance of and how to measure “Gross National Happiness”. The United Nations has a Commission on Happiness which commissioned Columbia University’s Earth Institute to create the first World Happiness Report.

Our knowledge of what makes people happy has radically changed over the last 20 years. Positive Psychology has played an important role in the rise of happiness as a measure and one finding is that a significant portion of how happy people report they are has been linked to genetics. There are some people who are simply more inclined, through genetics, to be happier. One question that arises revolves around what can people do, if anything, to influence the natural level of happiness they are born with? Is it all genetics or can the environment or certain behaviors influence your base level of happiness?

From a business performance perspective, do happier employees result in happier customers? Is there a linkage? Do happier employees result in higher levels of organizational performance? And before organizations run off and start looking to hire only genetically happy workers, the latest research findings imply that the happiness gene can be impacted by environmental conditions. Happiness is not a specific set point or a specific degree as determined by your genes, rather it appears to be a range and your environment and your behaviors will determine where you will live within that range. Some people have a naturally higher range and others will have a lower range. A person with a higher natural range who is doing all the wrong things can have a lower happiness score than a person with a lower natural range but are doing all the right things. The interplay between nature and nurture (and other environmental factors – such as drug usage) is both more subtle and more complicated than has been previously thought.

Happiness can be thought of as a formula, as difficult as that may be for some people. Happiness equals your biological set point/range (S), plus the external conditions you are living under (C), plus the voluntary activities you undertake to improve your happiness (V).

Happiness = S + C + V

As I mentioned “S” in the above formula represents your biological pre-disposition and is a range of potential happiness you are capable of experiencing. The level you are experiencing can change day-to-day. For instance, if your son or daughter just got into the college they always dreamed of attending your happiness score will rise (as will your pride in your child), but when you get the first tuition bill your happiness score may plummet (as will your bank account balance). Yet you operate within your genetically determined happiness range.

“C” represents external conditions that matter for your happiness. These fall into 2 main groupings, those you can’t change such as race, age and gender (or at least things you can’t easily change) and those you can change such as marital status, where you live or your income level (sometimes also not so easily changed).

“V” represents thing you choose to or don’t choose to do. These are voluntary activities that can change where you fall in your happiness range. These things can include exercise, education and learning new skills, volunteering your time, charity work, meditation, playing a musical instrument or even taking a vacation. Total immersion in a task that gives pleasure is one sure way to increase the “V” component of happiness.

Things in the above formula can get a bit tricky as we are dealing with complex humans after all. In order to maximize the “happiness effect” of both “C” and “V” you need insure that you do not become adapted to or too used to the activity. If, for instance, you are always on vacation, then taking a vacation loses some of its specialness and the impact on your happiness can diminish over time as you spend more and more time on vacation. Playing a musical instrument may be a real pleasure in your life until you are forced to practice for hours at a time. This pattern of adaptation is why wealthy people tend not to be as happy as you would think. They become acclimatized to being wealthy and it loses much of its impact. But don’t get me wrong it is a lot easier to be happy when you have money than when you don’t have any. And if I had to be unhappy, I would rather be unhappy and wealthy than unhappy and poor. The point is not to look at a level of wealth as a never ending source of happiness. That won’t happen.

Physical pleasures which are voluntary and intermittent, such as eating rich food or having sex (people report the highest levels of happiness immediately after having sex) follow the same pattern. If you become satiated with an activity, but continue with that activity, the ability of that activity to impact your happiness will diminish. And at the extreme level continuing with an activity, perhaps eating ice cream well past the point of satiation, can create a state of disgust, lowering your happiness level.

Within the world of work, happiness can be increased by giving people more control over their work and working conditions. For instance, having an IT department dictating exactly which laptop a worker gets, based on their level or position in the workforce is one sure way to reduce happiness overall. Giving workers a menu of acceptable choices and then giving them control to choose the best choice for their own situation is a very simple example of how to improve happiness. The same holds true if you can give workers more control over their work schedule or locations. In general when people feel that they do not have control over their lives, including aspects of their work situation their happiness will diminish.

One experiment which demonstrated the impact that control over your living situation can have occurred in a nursing home. Residents were given control over relatively simple aspects of the lives within the nursing home (e.g. which art work would be hung on the walls). Nurses reported that residents who were given more control over their living conditions had higher levels of happiness, as rated by the nurses. But beyond happiness these resident also had fewer deaths within their ranks than a control group. So happiness levels that someone was experiencing had a physical affect.

Combine this with the finding that people are more positive about many things when they sense positive movement on an issue, movement having even more of an impact than absolute levels, and you begin to get a sense of what makes an employee and people in general happy. For instance in one ongoing study of employee positiveness, the most positive employees did not come from countries with the highest levels of economic performance or GDP, but rather from those countries with the most rapidly improving GDP levels. In other words things were perceived as getting better for people economically.

A special mention needs to be made about task immersion, a state called “flow” by Mihaly Csikszentmihaly one of the founders, along with Martin Seligman, of Positive Psychology. When someone is in the flow, they are totally immersed in a task that is appropriately matched to their skills. They give examples such as painting, writing, photography, singing and dancing. I could add examples such as solving work related problems, building a house, writing a program, fixing a machine, etc. When a worker is in the flow, happiness will be greatly increased. These are the pleasures a worker experiences in simply doing a good job at work and when the work is matched to the appropriate worker. And as mentioned above however, if the work is past the point of satiation the happiness that the work can bring decreases until the activity can disgust the worker.

There are many ways to impact an employee’s happiness. Among them pay, benefits, job security, recognition, advancement opportunity, respectful treatment, working for an organization that is viewed as having effective leadership all have roles to play. The relatively recent research on happiness implies that increased levels of happiness can also be achieved when a worker is accomplishing something (something they feel is important), learning something (new skills to prepare them for the future), or improving something, moving the outcome in a positive direction (a product, a process or themselves). Happiness is positively impacted by giving people as much control over their environment as possible by making them feel in control of their lives. Happiness is also generally positively impacted if people can help others, building and strengthening social connections.

There is still much to be learned about happiness, especially in the area of its impact on organizational goal attainment and customer satisfaction, but it does seem clear that well-run organizations can benefit from doing some relatively simple things that can increase employee happiness.

[tweetmeme source=”jeffreysaltzman”]“The great majority of mankind are satisfied with appearances, as though they were realities, and are often more influenced by the things that seem than by those that are.”

Niccolo Machiavelli

I sometimes think of my job as holding up a mirror to an organization so that it can see not what it wants to see but what it has to see. While people in almost every organization like to think their organizations are unique, most organizations really fall within a few common patterns, with some nuance, when it comes to employee survey findings. Here are some common patterns:

In most organizations there are virtually no differences to be found when the data is cut by gender, ethnicity, or generation. While there are some slight differences to be found, (e.g. females are often a hair more positive, as are traditional part-timers), on organization performance items like customer focus, quality, leadership, communications, decision making, cooperation and teamwork, looking for differences is like searching for a meaningless needle in the proverbial haystack. When differences are seen it is usually indicative of significant underlying organizational issues.

The largest differences are most reliably found on an employee survey when you cut the data by occupation or level within the organization. Managers are generally between five and 15 points more favorable (the more senior the more favorable) on survey items than non-managers, depending on the item. They are typically less favorable on customer service/focus, resources and product quality. When the differences are larger it is usually a sign that senior management is living in a different organization than the other employees experience, and that each group would have difficulty seeing the world from the other’s perspective. It is not unusual though for administrative groups to be more favorable than their level suggests.

The most favorable group completing the employee survey will very reliably be the employees that you just hired. Specifically, those with less than 12 months tenure. It takes the typical organization about 12-18 months to beat that positiveness out of the new employee. Disillusionment with organizational effectiveness, training, advancement opportunity, pay and other frustrations as well as the sense the organization is not as was advertised, drive the numbers down.

The least positive will be those with around 3-5 years tenure and in many organizations there will be a gradual recovery in positiveness over time, but it usually never gets as positive as the newly hired employee was again. A small number of organizations can buck this trend and what they do in order to accomplish that is very interesting.

By geography the least positive employees in the world are pretty reliably the Japanese (with a few exceptions). The most positive are those in Latin America and some other parts of Asia (e.g. Indonesia, Thailand, Vietnam). The USA is below Latin American, with the UK trailing the USA and continental Europe lagging behind the UK. Russia and the USA look remarkably similar on a large number of items.

The best way to predict turnover with an employee survey is by asking the employee directly if they are going to stay or leave. They tend to answer very honestly. If anyone tries to sell you some mumbo jumbo predictive index, walk away. There is nothing better out there than simply asking that one directly.

The best way to predict customer loyalty is to ask the employee about whether customer issues are resolved quickly.

The best way to predict accidents is to ask about the safety environment and the emphasis placed on safety. Are you getting the idea yet?

Employees are generally more critical of product and service quality than your customers are. They see how the sausage gets made.

Employee Engagement is no magic bullet and is rarely predictive of many critical organizational performance metrics.

While not every organization out there is as unique as perhaps they think they are, there are certainly some organizations that are performing better than others in various aspects. And there are some organizations out there that could really benefit from a well done employee survey, focused on the right things, aimed at improving effectiveness and performance and monitoring employee sentiment and insight. Sometimes all sorts of excuses are given to avoid having to look at the organization squarely in the mirror. “We just had a bad quarter, or are in the middle of a reorganization, or we are unveiling our revamped strategy and vision, or we are rolling out new products” etc.

Organizations making excuses like that, I would bet, would be extremely reluctant to use those same arguments with respect to tracking financial performance stating, “we had a bad quarter so we are going to skip tracking the financials this quarter. We will start again perhaps next quarter when we believe the numbers will look better.” They simply would not be able to get away with it. If people are truly an organization’s most important asset, as is so often stated, how can their opinions, observations, insights, and emotions be ignored?